Charitable Gift Annuities

Charitable gift annuities are similar to other annuities in that a lump sum is exchanged in return for a series of payments. However, instead of involving an insurance company there is a contractual agreement between the donor and nonprofit that manages the charitable gift annuity. The funds are invested, and while the donor is living they receive payments from the charitable organization where they established the charitable gift annuity. Upon their death, their chosen charity receives the remaining annuity balance. There are some potential advantages to charitable gift annuities over a more traditional donation.